UK MARKET TALK ROUNDUP: BROKERS COMMENTS

20th Jul 2010 07:52

Broker comments in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 0652 GMT [Dow Jones] IG Group (IGG.LN) reports strong fiscal 2010 growth, says UBS, though most of the figures were announced in June so it was already well-flagged. A final dividend of 13.5p beat the bank's expectations, though, and it expects the strong growth to continue in the medium term, particularly in Europe. UBS has a buy rating and 500p price target. Shares closed Monday at 467p. ([email protected]) 0649 GMT [Dow Jones] Cable & Wireless Worldwide's (CW.LN) FY Ebitda is looking to be at the lower end of expectations, says an analyst, commenting on the company's interim management statement. Is most concerned with regards to UK austerity measures. Says non-contracted spending in the UK public sector has slowed significantly, which could adversely impact trading in the current year due to the company's public sector business. Sees read across to other peers. Shares closed on Monday at 84p. ([email protected]) 0636 GMT [Dow Jones] IG Group's (IGG.LN) preliminary results for the year ended May 31 '10 are in line with the interim management statement back in June, says a trader. Says this suggests that client activity is still strong. Says the company seems to have addressed its bad debt issues, which affected its '08 numbers. Lower volatility during the financial year also helps here. Notes that the stock has had a good run of late. Suspects that it could start positively but then pull back. Shares closed on Monday at 467p. ([email protected]) 0619 GMT [Dow Jones] HSBC raises International Power (IPR.LN) target price to 370p from 340p, after France's GDF Suez (GSZ.FR) renews talks with the company about a tie-up. HSBC says a tie-up with GDF-Suez would be compelling financial and operational logic for International Power. "Listing of an international energy combination would liberate a growth business," adds HSBC. Retains an overweight rating. International Power shares closed Monday at 350p. ([email protected]) 0611 GMT [Dow Jones] ING downgrades Vodafone Group (VOD.LN) to hold from buy and cuts target price to 155p from 165p. "We do not expect the upcoming trading statement [due July 23] to be weak but have concerns about operational performance in Italy and Spain," says ING. It reckons that at current levels, Vodafone needs to deliver on its plans for value realization through some portfolio changes, but ING does not believe anything is imminent. "We are concerned about negative newsflow around developments in India, taxation, and spectrum. Lastly, we note that earnings momentum will not be helped by the weakness of the euro," adds ING. Shares closed Monday at 145p. ([email protected]) 0610 GMT [Dow Jones] Jefferies initiates coverage of London-listed specialist insurers with a positive view. Starts Amlin (AML.LN) and Lancashire Holdings (LRE.LN) at buy with 478p and 638p targets respectively; Catlin (CGL.LN) and Hiscox (HSX.LN) at hold with 406p and 371p targets respectively; and, lastly, Brit Insurance at underperform with a target of 804p. Does not agree with the general view that these stocks are volatile and potentially under-capitalized. Thinks the sector offers the potential for yields to reach double-digit levels. Has a preference for well-run, attractively valued stocks that can deliver through the soft cycle. These include Amlin and Lancashire. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 20, 2010 02:52 ET (06:52 GMT)